DAULAT TUANKU!!
‘It will be insane to tell investors not to come to Johor’ | New Straits Times
PROGRESS: Johor ruler Sultan Ibrahim Sultan Iskandar has been keeping a strict diet ahead of his coronation tomorrow. On certain days, his diet is made up of just fruits. He has shed some 20kg since January.
As we walked into the newly refurbished renovated Istana Bukit Serene for a rare interview with him ahead of his big day, we could not help but notice a brand new hot pink Rolls-Royce Phantom parked in the driveway. The NSTP team was then ushered inside this grand, 78-year-old Art Deco palace with a green roof and limestone walls, topped with a 35m etre tower. The sultan, who was busy with the final fitting for the coronation costume with his tailor, Datuk Jack M.K. Lee, later emerged. After an hour-long interview with A Jalil Hamid and Jassmine Shadiqe, during which he addressed many controversial issues, ranging from his businesses to reclamation projects and the influx of top developers from China, the sultan then invited us for a sumptuous lunch. He indulged in a big plate of beef steak that day. But his mind was preoccupied with his son, Tunku Laksamana Johor Tunku Abdul Jalil, who had to be hospitalised. He then drove off alone in the Phantom to the hospital, with his security detail trailing behind.
ON HIS BUSINESSES, FOREST CITY AND TANJUNG PUTERI PROJECTS
Question: How do you respond to those who talk about Tuanku’s involvement in business while being a ruler of a state?
Answer: Is it wrong if I buy shares? What is wrong with buying shares? There is nothing wrong with me buying shares. I just buy shares but I do not sit on any the board of directors. For example, at REDtone International Bhd, I am not on the board of the directors.
(The Johor sultan is the single-largest individual shareholder in REDtone following a spate of open-market purchases, coupled with the conversion of his warrants and convertible loan stocks into ordinary shares. The recent activities have boosted his holdings in the company to 20 per cent from 4.8 per cent previously).
During In good times, if I think I can make money, I sell the shares. To me, there is nothing wrong with in me buying shares.
I bought Berjaya Times Square Sdn Bhd for a reason, basically, for its high-dividend returns. The returns are higher compared with commercial banks. I am a strategic investor. There is nothing controversial about this. Those who are bickering about this... it’s actually a case of sour grapes.
I am not a typical businessman. I am more of a strategic investor. I learn about the trade and I invest on the advice of my bankers. The bank is the custodian of my money. The bank makes sure that my money makes money. If the investment is bad, they will advise me not to do it.
When I see potential, I grab the opportunity. I do not bid for projects, like hydroelectric power, construction of airports, roads or similar facilities, because that will be interfering with others.
Forest City, which will be built in southwest of Johor, was my idea. I brought the Forest City investors in. The developers took into consideration my ideas. The investors visited the proposed site and established that it was strategically located. They have confidence in the government and me, and they are also comfortable here in Johor, which is peaceful, united and strategically located.
So what is wrong if developers from China want to invest in Johor? We have all the stability investors are looking for. We have an open-door policy; every reliable investor is welcome to invest in Johor. It will be insane to tell investors not to come to Johor.
The spill over effect will benefit the people. Forest City will create over 250,000 jobs opportunities for Johoreans. Via this investment, I am creating opportunities for retailers and upgrading our transportation system, among others.
The government, too, will benefit. They will receive fees in the form of annual assessments and quit rent, among others. The people should grab these opportunities. If they don’t, others will.
Question: Is the potential spin-off from Forest City huge?
Answer: It will be very huge. For those who are still unaware, my advice to them is to undergo a proper briefing and get have a better understanding.
Question: In other words, you are not actually a businessman, but an investor?
Answer: I am not like any ordinary businessman. I don’t go to an office or conduct day-to-day operations. I don’t attend meetings or conduct annual general meetings. I buy shares, I sell shares. I study about shares. I grab the good ones that have potential. For example, the Princess Cove project in Tanjung Puteri. Some people wanted the land for free to be injected to some major public listed companies. There were two people who wanted the land. I won’t name names. An independent evaluation was done on Tanjung Puteri and a price was offered based on the market value. I paid the government… above its market value (for the land). I rounded up the figure offered and made the government an offer that they could not resist. Only after securing Tanjung Puteri via a transparent dealing did I enter into a joint venture. I did not take the land free of charge. I paid extra for the land because I want the state government to make money, which will be channelled back to the people. That’s why I paid them extra.
Question: How much did the government want to sell it for?
Answer: If you look at the evaluation those days, it was not much. About RM100 million.
Question: Tuanku basically paid double for it?
Answer: Maybe? (smiling). Yes, I did.
Question: Eyebrows were raised when you sold Tanjung Puteri to China developer Guangzhou R&F. There were claims that you made RM4.5 billion.
Answer: Let me explain how this figure came about. I have a 30 per cent share with the joint-venture company. I foresee a RM100 billion gross development value (GDV). Under the normal industrial norms, you will make at least, even in the worst scenario, between 20 and 25 per cent in profits. So, I did basic arithmetic. What is 30 per cent of 20? That is six billion. That is the profit at the end of the day in 10 years by looking at the GDV. But, do I want to wait 10 years? Would I know when the market will weaken? I would not know. What happens if the joint-venture company starts to adjust figures? At the end of the day, profits can be adjusted.
I am not willing to take that risk. I asked for my profits in advance and in return, I offered them a RM1.5 billion discount. That is how RM4.5 billion came up. I did not sell but I took profit in advance. Get that?
Then, everybody thought: “Wow, this is the benchmark in Johor.” They were wrong. You cannot put a value of RM900 per sq feet.
Now, is there anything wrong with what I did? No! I didn’t lobby anybody. It was a transparent deal that will see Johor progress in the future.
Question: The one thing that people are unaware of is that you have given money back to the government, which was spent on development. Is that true?
Answer: Yes! What I have given to the government is RM845 million. Nobody talks about that. The cost of the land and the premium all went to the government. Why do you think my government is now enjoying a surplus (budget) today?
I have also been approached by China’s e-commerce giant Alibaba Group. They want to bring Alibaba to Johor. Johor will be the main distributor for Alibaba in the Asia Pacific region.
The company plans to bring branded apparel and accessories to Johor. They have the strength to do so.
Question: What will happen to Johor Premium Outlets (JPO)?
Answer: We are not bringing in something like JPO. We will be a technology hub. So, the technology hub only “handles”, without having retailers like JPO. All are premium items. They will set up their centres. I do not know how they operate. But we have heard about Alibaba. Some say they are better than Amazon.com.
Get it right. The way I do business is not like what people say: “He (sultan) is a businessman, conducting business.” No, I don’t.
Question: Why do we need to reclaim land to develop Forest City when there is a lot of land in Johor?
Answer: It’s easier. We reclaim land to develop. On shore, you have (to have) acquisitions. A brand new piece of land is easier to plan, even for better road distribution. Where can I find an existing piece of land here in Johor of that size which is surrounded by with water? So that’s why I plan. When I saw the place, I decided, here is the best place.
Question: What about marine life and environmental issues?
Answer: A lot of people are so jealous. They politicised Forest City because they are jealous. It’s a case of sour grapes. Forest City is a catalyst for to the state’s development and not a controversial one. Many people just want to make things difficult for us.
For instance, other developers are required to set up only one siltation control curtain (to reduce sediment run-off), but we were told to put up three layers of silt curtains. We abide by the rules. It doesn’t matter, even though it cost us three times more.
Question: One of the reservations came from Singapore. They said it narrowed the straits and restricted water flow, hardly without realising that they have been doing this way before us.
Answer: Singapore’s Tuas reclamation has breached into Johor’s port limit by so many metres… accidently. But we are a friendly state. If you say narrowing the straits, look at Tekong (Pulau Tekong, how narrow it is. I am not comparing Singapore with us, or what they can do and what we can’t do. We have our own plans and they have their own plans. I am sure Singapore followed all the rules. They are very strict on environment-related matters. They are checking on us, on what we are doing. It’s good that they check on us.
Question: Speaking of Singapore, is it true that Tuanku wanted to get rid of the Johor Causeway and build a bridge instead?
Answer: At the last meeting in Kuala Lumpur, what I heard was that the first bridge was nostalgic to former Singaporean prime minister Goh Chok Tong. I don’t know what Singapore’s plans are. But one day, I hope Singapore will agree with us, even if we need to remove part of the causeway for the flow of water and for the good of the environment. Yes, I would like that. Of course, a bridge is ideal. Besides that, we can build the most beautiful bridge. Let it be a landmark and we can call it the Friendship Bridge. Let the bridge show how friendly we are with our neighbours.
Question: Tuanku, you have said that a lot of things can be settled over a cup of tea with the Singaporean Prime Minister Lee Hsien Loong, since you have a very good relationship with your neighbour. So, has this Friendship Bridge been discussed?
Answer: When it involves two countries, it must go through the Prime Minister’s Office, Wisma Putra and the also with their Singaporean counterparts. But any discussions between Johor and Singapore, for just the two of us to agree upon, then it can be decided over a cup of tea. Come to my house, have tea, as long as it is a win-win situation, we can discuss and agree on anything.
I know that there will be a need for a Third Link. I agree. But we need to know where. We need to plan where. It must be beneficial both to Singapore and Johor.
Question: Where will the Third Link be most likely located?
Answer: I think most likely it will be somewhere in Changi (Singapore) (chuckles). I don’t know. It is between the two prime ministers (Datuk Seri Najib Razak and Lee Hsien Loong). I don’t know and I don’t ask. I am sure if there is a need, the government will bring the matter up.
Question: Apart from the “Friendship Bridge” and the Third Link, how about the KL-Singapore High Speed Rail (HSR) project? It will have to pass through Johor. Do you support this project?
Answer: Well, it is in the planning stage. I know where the route is. I know where it’s going to be, but let the government announce it. Yes, it passes through Johor, they sought an audience with me.
Question: Who are the “they”?
Answer: The Land Public Transport Commission (SPAD) chairman Tan Sri Syed Hamid Albar. He didn’t seek my permission, it was a courtesy call. He asked for an audience to explain about the project and the route of the track in Johor that the rail will pass through. My advice to him was very simple. Reduce the (land acquisition. Don’t trouble the villagers too much. Don’t cause too much interruption to the lives of the people in the vicinity. The high-speed rail will be on the west coast of Johor.
ON SOARING PROPERTY PRICES
Question: Tuanku, can you share your views on the people’s concern that they may not be able to afford houses in JB in the future given the rapid development in the city?
Answer: It is in the government’s plan to make affordable houses available to those from the lower-income group. Not every Johorean cannot afford to buy a house. There are some who bought really big ones, extremely big ones.
But here we are talking about those from the lower-income group. The government must provide them with houses that they can afford. But would you build a low-cost house on in the most prime land in the state?
One would not expect the government to build “warongs” (make-shift stalls) in Beverly Hills, now? No, you won’t.
Question: So the people should not have unwarranted fears, as there will be houses for all income groups?
Answer: Yes, there should not be unwarranted fears or concerns. With future developments in Johor, it will be the people who will benefit. Now, you only see hypermarkets in Johor, but with the current and future developments, I am sure many stores, facilities and high-end outlets will set up their businesses in Johor. Developers in Johor want to bring in the Ritz Carlton, the Grand Hyatt, among others, to Johor. They want to bring in branded goods, such as Chanel, Hermes, Gucci and all to Johor. Who will benefit from all these, if not the people? Once you have a population of locals and foreigners, why should they go to Singapore, buy one handbag and come back to Johor, when they can buy it all here? Now, who benefits? Who gets the jobs? Johoreans.
So don’t have negative perceptions of the developments in Johor. Don’t think that if Johor develops, there will no longer be affordable houses. Don’t assume that Johor Baru will be turned into the biggest Chinatown in the world. The so-called comment by the Malay Chamber of Commerce Malaysia president Datuk Syed Ali Alattas… please ask him, did he sue the government for RM28 million? He wanted two acres of land in front of Lido beach for the Johor Malay Chamber of Commerce. It was Iskandar Waterfront Holding that paid the over RM20 million in compensation.
(Syed Ali was reportedly said saying he was is brave enough to say that there was not one shop in the centre of Johor Baru that is owned by a Malay.)
Question: There are some quarters, like Syed Ali, who are worried that the Malays will be left out, especially in Johor Baru, with the rapid development.
Answer: How many per cent of Malays are there now in Johor Baru? Do your research. There is the Urban Development Authority (UDA), developers Pelangi Sdn Bhd, among others, which are still in the city centre. They did not leave or move. They are further building up. Since August last year, more Malays have been buying properties but there are also many Malays selling their properties to make a good profit.
When did the standard of living in Kuala Lumpur rise? It’s an inevitable process. There must be balance. It has nothing to do with me.
Question: In a way, Greenland Danga Bay, Country Garden Danga Bay and R&F Tanjung Puteri are the catalysts for Johor’s development. Otherwise, Johor would remain a sleepy town.
Answer: Yes, catalyst. Do you want Johor to have the reputation of being the backyard of Singapore? We don’t want that reputation. You look at Hong Kong. What was Shenzhen then? A farming town. And look at it today. Via development, Shenzhen is what it is today.
